Bart (eating injera and wot): “I wish I lived in Ethiopia”. Lisa: “Exotic. Vegetarian. I can mention it in a college essay. Mom: this is amazing!”.
In two weeks there will be a huge international meeting on aid effectiveness in Busan, South Korea. Ban Ki-moon and Hillary Clinton will be among the two thousand delegates who gather together to discuss improvements in how aid is delivered. Though David Cameron and Barack Obama said (in a joint statement) that they would ensure that Busan “transforms the way bilateral aid is delivered around the world”, it looks increasingly as if the meeting will, as Simon Maxwell notes on his blog, produce “a bark but no bite.” Though it is full of worthy intent, there is little in the latest (fourth) draft of the Busan Outcome Document which suggests that it will result in more changes in donor behaviour than did the communiques from previous summits in Rome (2003), Paris (2005) and Accra (2008).
Two key pieces of background evidence have just been published which provide the backdrop to the discussions in Busan. First, the Broookings Institution and my colleagues at the Center for Global Development have published an updated Quality of Official Development Assistance index (QuODA), which scores donors on the effectiveness of their aid. Second, Publish What You Fund has published an Aid Transparency Index ranking donors according to how much information they make available about the aid they give.
CGD and Brookings Quality of Aid Index (QuODA)
QuODA is an assessment of the quality of aid provided by 23 donor countries and more than 100 aid agencies. It uses 31 indicators grouped in four dimensions that reflect the international consensus of what constitutes high-quality aid:
- Maximizing Efficiency
- Fostering Institutions
- Reducing Burden
- Transparency and Learning
QuODA itself does not provide an overall ranking of donors. The reason is that your view about the overall effectiveness of a donor will depend on how much weight you place on each indicator. But for what it is worth, here is how the ranking of donors looks if you give equal weight to each of the four QuODA dimensions:
Donors may quibble about which of the indicators are important, though all the indicators reflect solid academic research and experience about what makes aid effective, embedded in the international consensus about aid effectiveness to which they have signed up. For anyone wanting to focus on particular indicator and dimensions of effectiveness, the data are published online in an interactive web tool.
My two observations about this are:
- almost every donor has something to be proud of (nearly every donor is in the top half in at least one dimension) but all donors have considerable room for improvement;
- the multilateral agencies do better, on the whole, than the bilateral agencies; this may be because they are less susceptible to pressures from national donor politics; the World Bank, in particular, scores extremely well across the board
The Publish What You Fund Pilot Aid Transparency Index
The PWYF Aid Transparency Index, published today, dives deeper into whether donors publish adequate information about the aid they give. They analyze 58 organisations on 37 dimensions of transparency, mainly relating to whether information is available about particular projects and activities.
The World Bank tops the transparency index too. Indeed, there appears to be a strong correlation between aid transparency and aid effectiveness more generally. The chart below plots the PWYF transparency scores against the average of the three dimensions of QuODA which do not relate to transparency.
This correlation between aid effectiveness and transparency could come about for three reasons:
a. common causes: well-governed and well-managed aid agencies are likely to be both more effective and more transparent;
b. effectiveness causes transparency: aid agencies that are ineffective and know it are likely to want to be secretive; agencies that are effective are likely to want to tell the world more about what they do;
c. transparency causes effectiveness: agencies that are open and transparent are less likely to make decisions to use aid ineffectively because they will be held to account by politicians and the public.
Conclusions
The good news from both the QuODA index of aid quality and the PWYF Aid Transparency index is that it is possible for donors to live up to the goals they have set themselves to make aid more effective and more transparent. Most donors do well on some indicators, and yet are a long way behind the best on others. The bad news is that there is a long way to go before donors overall live up to the pledges they have given.
Time will tell whether yet another conference, and yet another communique, will make any more difference to donor behaviour than have the last three. However, there does now seem to be welcome momentum towards putting more information about aid into the public domain, and we may hope that this will, over time, provide both the information and political pressure needed to make aid more effective. If Busan succeeds in giving a big push to aid transparency, that may be the biggest contribution it can make towards the ambitious goal of ‘transforming’ aid.
Here is a useful graphic from the International Aid Transparency Initiative about which donors are implementing it, and when.
This post first appeared on the CGD Rethinking US Foreign Assistance blog.
Information, not coordination, is the key to aid effectiveness. Some donors such as USAID are becoming interested in a more decentralized ‘Google Maps’ approach to aid coordination, to facilitate well-informed decisions by people on the ground. For this to work, donors need to do two things: publish more detailed project level information, and do so in an open, reusable, internationally consistent data format. Transparency aimed at a domestic audience is not sufficient.
We now know that the development system has met just one of the 13 targets it set in 2005 for making aid more effective. That is not surprising: the problems diagnosed in the Paris Declaration are real and important, but the solutions that have been pursued in its name have not been practical. There are better ways to achieve the aid effectiveness which the Paris Declaration envisages.
Here is an example of the problem, from Indonesia after the 2004 tsunami:
“Last February in Riga [close to Calang in Indonesia], we had a case of measles. The epidemiologists from Banda Aceh gathered, fearing that the measles would spread among displaced people, but the girl was cured in two days. Eventually we discovered that this child had been vaccinated three times by different organizations, each without a vaccination card or any type of control. The symptoms were the result of these measles vaccines”.
Informal translation of an article in El Pais (April 13, 2005)
This is a graphic example of a widespread problem in development and humanitarian aid: a coordination failure leading to a substantial waste of money.
Following Paris, a conventional wisdom has grown up on how this kind of problem should be tackled. The regional health department should call a big meeting of all the donors and NGOs who might be interesting in running an immunization programme. They should share information with each other about their plans: which vaccines they intended to administer, and where. Under the leadership of the ministry, the donors should agree a division of labour to eliminate overlaps and ensure that aid is used efficiently.
Similar committees would have met to plan and coordinate every other kind of intervention to avoid overlap and make the best use of limited resources.
You don’t have to have a degree in Political Science to be able to see why this committee approach does not work. A country director for a large government aid agency recently told me that he spent more than half his time in donor coordination meetings. Most of each meeting is taken up by donors listing what they are doing. (Not surprisingly, he has now quit.)
So what is the alternative?
Once an aid agency has been licensed by the health ministry to provide vaccinations, it could simply publish online, in an accessible format, details of its plans and activities. Another organization planning its own programme could then easily check how they can best fit with what other agencies are doing. With open information sharing, no child would be vaccinated against the same disease twice; and under-reached populations could be easily identified and served.
This is an example of an important general point about improving aid effectiveness. Aid staff on the ground should not be stuck in endless coordination meetings: they should have the information they need to make good decisions about how to have the biggest impact, within a regulatory framework established by government, without being constrained by inappropriate rules and incentives imposed on them from far away.
A Google Maps approach to development?
There is growing interest in a ‘Google Maps’ approach to development coordination. We have seen welcome moves towards mapping of aid projects, for example by the World Bank, USAID, and Canadian CIDA. But as the example of vaccination in Banda Aceh illustrates, the key to making this information useful is that sufficiently detailed data from many different organisations is available in one place.
Some of the momentum towards greater aid transparency is driven by the need for increased accountability to taxpayers in donor countries. This is a laudable goal, but if data publication is targeted on this purpose alone it misses even bigger potential benefits from transparency. The US Government is making gradual progress on its Foreign Assistance Dashboard and a geographical coding system: but on current plans the data will not contain enough substantive detail. It will record information which is good enough to get a broad sense of where aid is being spent (‘top level administrative region’) but will not record specific locations (‘street corner’). This approach may be enough to meet the needs of a US accountability agenda, but it will miss the opportunity to use robust project level data and geo-coding to track and coordinate aid, to close down the space for corruption and waste, and to link feedback from project beneficiaries to specific aid funders.
It is also important that aid information is published in a reusable open data format, which has been agreed by a large group of donors in the IATI standard. Several donors – including the World Bank, the European Union, DFID, Australia and the Netherlands – are now publishing their data this way. Other donors have plans to do so. While it is welcome that Canada is publishing more detail about its aid projects, as the website makes clear the target audience for this information is “all Canadians”. The information published by CIDA is of almost no use to people in developing countries because it is not published in a form which is compatible with data from other all the other donors. Open data – in the sense of being genuinely accessible and comparable – enables civil society, parliamentarians and citizens of developing countries to be part of the coordination and accountability from which they are presently excluded.
In contrast to Canada, the United States has said it will ‘cross-walk’ its aid data to the IATI standard, which is extremely welcome. But so far they have not done so. While the implementation of a Foreign Assistance Dashboard is an important step towards domestic US accountability, all this data will only be of use internationally to make aid more effective and accountable when it is also published according to the international data standard.
Of course, USAID and State Department have limited resources and should be spending their money as much as possible on aid rather than administration. But as the World Bank has found out with its Mapping for Results project, it is not tremendously complicated or expensive to geo-code aid projects – and it will be even easier if that is done at the outset by front line staff who have detailed knowledge of the projects, rather than retrofitted afterwards in Washington. Nor has it proved difficult or expensive to organize data into the IATI format: I am told it took UNOPS just four weeks to implement IATI, from start to finish. There are many other donors, and organisations such as the Development Gateway, AidData and aidinfo, who have experience in geo-coding projects and publishing information in IATI format, who would be glad to help to design procedures, set up systems, and even to share their computer code. Furthermore, the administrative savings from reducing duplication by publishing open data are estimated rapidly to outpace these modest implementation costs. This is not primarily a question of money, but of leadership, recognition of the value of transparency which serves international as well as domestic audiences, and a willingness to reach out to work with others.
We can – and must – make aid more effective. This means making sure that decisions on the ground are likely to yield the biggest possible impact, and for that we need not more coordination meetings but better information, greater decentralization, simplified systems, fewer perverse incentives and more accountability.
If you have comments please put them on the CGD website.
This joint post with David Roodman first appeared on the Guardian Poverty Matters blog.
Does Britain’s remarkable political consensus supporting foreign aid obscure a more ambiguous overall footprint in the developing world?Though by no means unanimous, Britain’s cross-party agreement to protect the aid programme from budget cuts is admirable. It reflects an understanding that it is ultimately in the national interest to support development, as well as being the right thing to do.
But there is more to helping poor nations to develop than giving aid. Rich and poor nations are linked in many ways: through trade and investment flows, migration, the environment, military affairs and technology. Governments influence all these channels, for good and ill. They subsidise their own agriculture, undercutting poor farmers overseas. They send peacekeepers to nations that are healing after civil war. They tax petrol, slowing global warming. They promote technological change, but limit its spread through patents.
Poor countries do not want to depend on aid: they want the opportunity to trade and grow and play their full part in the world economy. Their ability to do so depends in part on how the rich and powerful behave. That’s why the Centre for Global Development produces the annual Commitment to Development Index (CDI) to assess rich nations on their overall impact on the developing world.
Interactive: the Commitment to Development Index
In the latest index, published on Tuesday, Britain ranks 12th out of 22 countries. As you would expect, Britain scores well on foreign aid (ranking 8th). British aid is respectable for both its quantity, now at 0.51% of national income, and for its quality — the Department for International Development (DfID) tends to avoid parcelling aid out in penny packets, which impose an administrative burden on understaffed recipient governments.
Britain’s place in the CDI, however, is hurt by weaknesses elsewhere. Along with France and the US, it is a major exporter of weapons to undemocratic nations such as Saudi Arabia, which this year deployed its military to put down pro-democracy protesters in Bahrain. That’s why the UK ranks 19th out of 22 on security.
Once again the Nordic countries and the Netherlands come top of the league. Generosity with aid plays a part, but so do progressive policies on the environment (especially, limiting greenhouse gas emissions) and migration (welcoming legal immigrants from developing countries). Japan and South Korea are the least development-friendly, with high barriers to goods and workers from poorer nations and low contributions to foreign aid and peacekeeping operations.
Given the Blair government’s high-profile commitment to Africa, it is interesting to ask whether Britain does well by that continent. In fact it does, which one can see by selecting “sub-Saharan Africa” in the interactive. Doing so zeros in on aid to Africa, barriers to African imports, secondments of troops to peacekeeping in Africa, and so on. The UK comes fourth, behind only Ireland, Portugal and Sweden.
As you can sense, we have packed a lot into the CDI. The interactive lets you explore the details. The index is based on publically available data, and on the Centre for Global Development site you can find all our calculations so you can see how the scores are produced. You can also browse through performance reports for each country, and background papers. For the technically savvy, there are online spreadsheets and databases.
The Centre for Global Development has worked hard to improve the CDI. But it is not an infallible measure of development impact and intent. You can argue about almost every indicator. Are big aid projects always better? What if carbon emissions fall for reasons that have nothing to do with government policy? And should it include economic policies, such as bank regulation and interest rate settings, which also have huge effects overseas?
We welcome such discussion. For us, the real goal is not an infallible index, but more awareness of, and readiness to improve, the full range of policies that affect the lives of the global poor. Aid alone is not the way to measure our footprint in the developing world. The CDI shows that every country can improve on many fronts.
David Roodman is a senior fellow at the Centre for Global Development and the architect of the Commitment to Development Index. Owen Barder is a senior fellow and the Europe director of the Centre for Global Development
From the Financial Times comes news that David Cameron and Nick Clegg are planning to employ more political special advisers than the previous government; while the media and public try to work out whether there is anything improper about the Defence Secretary’s working relationship with Adam Werritty. The role of Special Adviser was invented by Harold Wilson to address the need for Ministers to have access to explicitly political advice alongside the civil service.
It is a shame that an increase in the number of special adviser posts is treated as an indicator of either profligacy or politicization of the civil service. Special advisers have played an important role which has helped the civil service and protected it from being drawn into party politics. In my civil service experience over 25 years, I worked with some excellent special advisers. Some of them, such as David Cameron, John Bercow, Ed Miliband and James Purnell, have gone on to other jobs in politics. Others have returned to jobs in business, think-tanks or public relations. I worked with some duds too: that’s when you really came to appreciate the advantages of having good one.
Norman Lamont, then Chancellor, with his Special Adviser
A good special adviser plays an important role in government by helping the civil service to think about the political implications of policy options – which is an essential perspective if policy is to be well-designed and implemented. They work with civil servants to identify the political questions that ministers are likely to ask, and to provide satisfactory answers, helping to smooth the policy-making process. They deal with party political issues – such as writing speeches for party events and dealing with party processes. Without special advisers, civil servants in Ministers’ offices would inevitably end up being drawn into these party issues. Special advisers also play an important role in helping to break down the silos across Whitehall – they often do at least as good a job as the civil service at identifying issues requiring cross-departmental discussion, and helping to broker agreements across government. All this is provided within a reasonably well-regulated structure which helps to avoid accusations of improper influence by outsiders.
The total cost to government of all this is about £7 million a year – in other words, negligible, relative to the institutional benefits of having a transparent arrangement which ensures that Ministers have access to alternative sources of advice from a political perspective. The Institute for Government recently recommended the appointment of additional special advisers to strengthen the functioning of the coalition government.
Michael White asks in today’s Guardian why Liam Fox didn’t make Adam Werrity a Special Adviser. I don’t know the answer, but a possible explanation is that each minister has a quota, in an attempt to keep the numbers down. Gordon Brown, when he was Chancellor, got round this by appointing a “Council of Economic Advisers” instead. It is sad to see a cheap political tail (a fetish about the number of Special Advisers) wag an important institutional dog (having a structured mechanism for Ministers to draw on political advice if they wish).
The political establishment has become absurdly fastidious about the idea of Ministers getting advice from a variety of different sources. There is no principle – nor should there be – which prevents Ministers from listening to the opinions of a wide range of people from outside the ranks of the civil service and special advisers. We should welcome a diversity of opinion, especially from people who are well-informed in an issue, which almost always means they have some sort of interest in it. These interests may be financial, institutional or simply a matter of doing something in which the person believes. There is no requirement that a civil servant must always be present when Ministers meet other people: the civil service is not there to police a Minister’s interaction with the outside world (and nor does the civil service wish to do so, though sometimes they may wish they had). It is up to Ministers to choose which advice they wish to heed, and they are accountable to Parliament for those decisions. The civil service already has privileged access to decision-making: it should not (and in my experience does not) aspire to have a monopoly.
So can we please embrace the role of Special Advisers in government; not impose too tight a cap on their numbers; and ensure that they are properly paid and supported? They play an important role in the strange ecosystem of government.
Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma — which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.
Steve Jobs 1955-2011
Commencement address at Stanford University on June 12, 2005
This is very impressive. Here in the UK we do not have paid political advertising: instead political parties are given a limited number of slots on British TV for a ‘party political broadcast’ to put their point across.
This year the UK Conservative party gave up their party political broadcast which usually coincides with the part conference, and used it instead to appeal the British public to give money for the East African famine.
There was an interesting programme on BBC Radio 4 on Monday night, Analysis, which looked at the following question:
The government is committed to protecting the aid budget. Frances Cairncross asks whether a more relaxed policy on economic migration might help the developing world more.
I was interviewed for the programme, and there were three points I wanted to make, which I didn’t entirely get across. So here they are:
a. It is too narrow to think of the benefits of migration mainly in terms of remittances. The benefits are much broader than that. Michael Clemens used an excellent analogy in a CGD podcast: it is as if we were determined to talk about the impact of the increase in women’s participation in the workforce by the money that they contribute to the housekeeping.
b. We should think about the impact of migration more in terms of the impact on people and less in terms of the impact on countries. In particular, there is a substantial benefit to the migrants themselves which should be at the front of our minds. (I sort of managed to make this point in the clip they used of me in the programme); and
c. there is not a trade-off between providing aid and supporting people from developing countries who want to live and work abroad: we can do both.
The programme will be broadcast again on Radio 4 on Sunday night at 21h30. You can also download the programme from the BBC website. (Mirrored here.) Here is the transcript.
This joint post with Rita Perakis first appeared on the CGD blog.
Has the aid industry introduced the reforms it agreed in 2005 to make aid more effective? No, according to the survey published last week by the OECD DAC. In this blog post we reflect on why this matters, and what it means for the forthcoming summit in Busan.
The development sector is in a mess. Developing countries have to deal with a large and growing number of partners, each with separate agendas, priorities, and requirements. Meetings, reports, milestones and systems multiply. Skilled staff are hired away from governments and from business to serve in local agency offices or NGOs. Funding is fragmented and unpredictable, which means that developing countries are often unable to bring together the scale of long-term, predictable finance needed to undertake significant institutional reform and service delivery. As just one example – in Vietnam, it took 18 months and the involvement of 150 government workers to purchase just five vehicles for a donor-funded project, because of differences in procurement policies among aid agencies.
None of this is news, nor is it disputed. The donor club of industrialised countries, the DAC, says:
“poor co-ordination and unpredictable aid waste funds that should be eradicating poverty in the world’s poorest countries.”
Six years ago developed and developing countries committed themselves to fixing these problems. The Paris Declaration on aid effectiveness set out five principles to make aid more effective, and a set of thirteen measurable targets which they aimed to reach by 2010.
Last Thursday, the Development Assistance Committee of the OCED (the DAC) published the results of the monitoring survey. The DAC is not known for hard-hitting criticism of its members. But even this mild-mannered organisation feels compelled to call the results ‘sobering’.
Of thirteen measured targets to improve the effectiveness of aid, just one has been met. What was this one milestone which donors were able to reach? They lived up to their commitment to talk more to each other (“Strengthen capacity by coordinated support”).
The DAC reports that the areas of progress have been largely on the part of developing countries. These include putting in place sound national development strategies and results frameworks, and improvements in public financial management systems. According to the report, the areas of little or no progress are overwhelmingly on the part of donors: aid is still not on recipient countries’ budgets, is no more predictable, and is becoming increasingly fragmented.
When developing countries fall short of targets set for them by donors, we say they are ‘off track’ and start to talk about cutting off their aid. What happens when donors fall short of targets they have set themselves?
The DAC points out that although the overall results are disappointing, some good progress has been made in some places. That’s true, and it is interesting that there is no obvious pattern. For example, though Tanzania is highly aid dependent, it appears to have been effective at imposing more discipline on donors. Some of the results suggest that the survey leaves too much room for interpretation: for example, Japan’s relatively strong performance against the Paris indicators is difficult to reconcile with perceptions on the ground.
The Paris indicators are not a direct measure of aid effectiveness. They are measures of progress towards goals which are thought by the Paris signatories to be associated with better aid. But that connection is tenuous: for example, though Tanzania has done well at pushing donors to comply with the Paris principles, nobody seems to think that aid in Tanzania now delivers more bang for the buck than aid elsewhere (rather the opposite, if anything).
It should be no surprise that progress towards the Paris principles has been slow. The aid system represents a compromise between the interests of donors and recipients, mediated by organisations and agencies with interests of their own. For example, donors have not been willing to make aid more predictable. That’s because there is political value to them in being able to dispense or withhold aid according to the latest fad or political pressure, and aid implementing agencies enjoy having the power of day-to-day control. Though retaining this discretion is estimated to reduce the overall value of aid by 15-20 percent, the political and institutional benefits to donors apparently outweigh the disadvantages of supplying less effective aid – perhaps because the people who suffer from ineffective aid don’t have votes in donor countries. Making an international commitment to fix this could help a little, because it adds very slightly to the political cost of lack of predictability. But the political cost of failing to meet this commitment is evidently too small to make a difference to the political calculation. That’s what we see in the monitoring survey: the proportion of aid that is classified as predictable has risen from 42% in 2005 to – drum roll – 43% in 2010: some way short of the target of 71% by 2010.
Can the forthcoming summit in Busan in November change this? It is hard to see how yet another conference with yet another communiqué will change these underlying political dynamics. The latest news is that Ban Ki Moon and Hillary Clinton are both planning to attend. Does the political weight of a communiqué increase in proportion to the size of the motorcades at the summit?
The political constraints which lead to ineffective aid are genuinely difficult to overcome. This should be ‘sobering’ to donors as a measure of their inability to fix long-standing and well-documented problems. But it should also be ‘sobering’ to those same donors who travel around the world pressing developing countries to implement reforms in the face of much more substantial political constraints. If donors cannot implement something as simple and uncontroversial as coordinated country missions or common procurement rules, why do they expect developing countries to be able to implement changes in land tenure or public enterprise reform?
We should give credit to the DAC for getting an agreement to reform, putting in place a monitoring system, recording the progress that has taken place, and stimulating the debate about aid effectiveness. But it is neither desirable nor sustainable that the donor club should be responsible for tracking the donors’ performance against their commitments. A more independent watchdog would surely have reported donors’ failure to meet 12 out of 13 targets with a greater sense of outrage.
Finally, all this is becoming increasingly anachronistic. The Paris principles are most obviously relevant to countries that are low income and stable. But there are now just thirteen of those: most of the world’s poor now live in middle income countries and fragile states. The DAC represents the donors who are members of the OECD, but does not include China and other emerging powers, foundations, private giving and NGOs, many of whom do not share the DAC’s view about what makes aid effective. The challenge for Busan is to define the role of aid in helping to build a sustainable, resilient and inclusive global economy.
Here is my talk at the Power of Information Conference about open aid data.
On Friday the World Bank London office had a meeting on ‘the Future of Aid’. The meeting was, according to the tortuous language of the invitation, “conducted in an informal manner with interested stakeholders from governments, civil society, private sector, media and academia with a view to explore new ideas on how best to explore cooperation between European actors and the World Bank Group in addressing these challenges.”
Annoyingly the meeting was held under The Chatham House Rule which means I am not allowed to report who said what. (Tangential thought: I am considering ignoring this in future if the invitation does not make it clear that this is the basis on which the meeting is being held.) I am allowed to tell you that the group included people from ODI (Simon Maxwell & Andrew Rogerson), a co-author of Philanthrocapitalism (Mike Green), DFID (Paul Healy Healey & Laura Kelly), the EBRD (Erik Berglöf, Gaspard Koenig & Hans Peter Lankes), and representatives from KPMG (John Burton), ActionAid (Lucia Fry), Save the Children UK (Jessica Espey & Kate Dooley) and BOND (Joanna Rey).
It turned out to be an interesting discussion.
First, there was considerable pessimism about the public’s appetite for aid. Opinion polls depend heavily on how you ask the question, but a common theme seems to be that the public’s concern for poverty and development is stable and quite high; while the public’s confidence in government aid is falling rapidly. There are several reasons why these may be diverging, which are not mutually exclusive. Declining support for aid spending may be the effect of the economic downturn; it may reflect a trend towards public distrust of bureaucracies; it may be the long term consequence of aid’s failure to live up to its supporters’ excessively grandiose claims of what it can achieve. There was some debate about whether a greater focus on ‘results’ could reverse this. Hardly anyone seriously argued that declining public support is merely a temporary consequence of the economic downturn which will reverse automatically when incomes start to grow again.
A second interesting theme was the tension between more effective aid, and aid which donors are willing to provide. It is possible that as the system shifts towards greater recipient country control of how aid is used (as envisaged under the Paris Declaration), so support for aid in donor countries declines. If you can’t use aid to promote your economic, commercial, security and strategic interests, then you might not want to give it at all. Bertin Martens memorably pointed out that the end of structural adjustment programmes in the 1980s (under which donors attempted to impose various policies on recipient countries) was followed by sharp decline in aid in the early 1990s. If you see the aid relationship as an equilibrium between the interests of the donors and the interests of the recipients, and if the Paris Declaration is an effort to move away from this equilibrium by reducing the power of donors and increasing the power of recipient countries, then perhaps declining aid budgets today are a consequence these modest moves away from the equilibrium. There is almost no public support for budget support (a form of aid which embodies many of the Paris principles) and budget support may now in retreat – so perhaps the aid system was temporarily pulled from its equilibrium by Paris, and may now be heading back to it again. In other words, there may be a choice between an abundance of somewhat ineffective aid which balances the interests of recipients and donors, and aid which is less conducive to the interests of donors, more effective at reducing poverty, but much less abundant. Aid agencies have a stronger internal interest in abundance than in effectiveness, and so will tend to support a return to the equilibrium in which aid is popular and plentiful, but not tremendously effective.
The third theme was the most interesting. Mike Green recalled an idea from Empire, a ghastly book published in 2000 by Antonio Negri and Michael Hardt, which suggested that activists may organize themselves as a ” post-modern posse”. Mike suggested that, in the absence of effective mechanisms for global governance to provide public goods in a rules-based system, we are left tackling these problems in temporary coalitions, or posses, which come together outside formal structures and without formal legitimacy. Examples range from the coalitions of the willing which come together to support military intervention, to the vertical funds which have proliferated in the aid industry. (Mike was not suggesting that this was desirable, but pointing out that this may be what happens in a second-best world without effective global institutions). This idea clearly resonated with the group, which recognised the applicability of the metaphor as a description of today’s development system. (Update: more on the ‘posse’ idea from Mike Green and Matt Bishop here.)
My own view, for what it is worth, is that:
- we should consciously reposition aid as support to those who are most marginalised to provide them with access to key services such as food, water, health and education, and move away from the idea that the purpose of aid is to accelerate economic development;
- that’s not because economic development isn’t an important objective; but it may not be the best use of aid;
- the main things that industrialised countries can do to promote economic development in the developing world may be changes in other policies ‘beyond aid’ such as trade, climate change, migration, climate change, cooperation on tax, tackling corruption and illicit financial flows; and arms sales;
- some organisations which profess to be interested in development are too heavily focused on aid and not enough on how we can improve these other policies.
This blog post was first published on the CGAP Microfinance blog.
It seems extraordinary that after 50 years of international aid, there is still no consensus on whether it works. Zambian economist Dambisa Moyo (Dead Aid) has argued that aid is not only ineffective, but is actually detrimental to development. Bill Easterly (The Elusive Quest for Growth) says that ‘trillions of dollars’ of aid have had little effect. Others, notably Jeff Sachs (The End of Poverty) and Roger Riddel (Does Foreign Aid Work?), have argued that there is plenty of evidence of the success of individual aid projects, and that it has brought about substantial improvements in people’s lives. If we cannot even agree on whether aid works at all, how can we address the more important and nuanced questions such as how to make that aid more effective?
At the heart of this disagreement is not a dispute about the impact of aid but about what we mean when we ask whether ‘aid works.’
Microfinance is an example which mirrors the issues in the wider aid industry. Microfinance has often been touted as a bottom up solution to poverty. The Nobel Peace Prize 2006 was awarded jointly to Muhammad Yunus and Grameen Bank “for their efforts to create economic and social development from below.” Give people access to credit, the story went, and they will be able to invest in businesses of their own. Instead of needing long-term support, the poor will be able to stand on their own two feet. The Acumen Fund promises “Dignity not Dependence. Choice not charity.” This attractive prospect is one reason that microfinance has been so successful in raising donor funding, especially from foundations and private giving.
Following dozens of studies of microcredit and microfinance, there is little credible evidence that microcredit itself lifts people out of poverty. The two good randomized controlled trials find no impact of microcredit on poverty (though to be fair they have not yet been running for very long). As the evidence has challenged these grandiose claims, some in the microfinance industry have chosen to defend aspirations which are both more humble and more plausible. First, there is growing recognition that much else besides access to credit is needed to enable poor people to run a successful business, and so microfinance can at best make a contribution to a wider set of circumstances needed for development. Second, there is recognition that, even if microfinance is often used for consumption rather than investment, it is still a significant improvement in people’s lives if they have more control over their finances and are better able to deal with uncertainty and volatility in their incomes. Third, microfinance may lubricate the process of experimentation and failure whichmay help successful firms and enterprises to emerge.
The rest of the aid industry would also benefit from a more nuanced account of its objectives. We often talk about aid as if it falls into two categories: humanitarian aid and development aid. But in reality this is a false dichotomy: most aid falls into neither category. More than 60 percent of aid is a long-term contribution to the provision of key services such as education, health, water and sanitation, and an investment in the institutions needed to provide them in the future. Improving people’s lives is a realistic and laudable goal. Measured against this more humble (but still very important) objective, there is plenty of evidence of the success of aid. Aid has helped to abolish smallpox, to increase the number of children in primary school, and to give families access to clean water and improved sanitation. Charles Kenny (‘Getting Better’) has convincingly argued that when measured by almost every standard other than income, the quality of life has improved substantially in developing countries. Foreign aid has made a significant contribution to these improvements.
It is tempting to make the bolder claim that investments in education and health also improve growth and development in the long run. Perhaps they do – but, as with microcredit, the evidence for this relationship is weak. Why is it not sufficient to say that people everywhere should have access to these services – including financial services – whether or not this leads to long-term transformation of their economy and society?
Everyone wants developing countries to escape aid dependency, and most people recognized that this requires sustainable growth and jobs. Because this is such a compelling objective, the development industry has been tempted to justify aid on these grounds. But the evidence from opinion polls and focus groups suggests that the public is willing to support aid which demonstrably meets immediate human needs irrespective of whether this contributes to long-run growth. By setting excessively ambitious objectives for aid, the industry risks alienating the public from their emotional connection with what aid can achieve, and asks to be measured by standards that it is unlikely ever to be able to show that it meets.
There are many flows of finance to developing countries which will contribute to investment and growth, including direct investment, portfolio capital flows and remittances. The main drivers of growth will come from the country itself through private and public investment. Aid is a small proportion of the finance for developing countries. But it is a precious resource because, unlike other sources of finance, it can help meet the needs of the most marginalized communities, women and girls, and people living in long-term chronic poverty. If we want to see aid used effectively, we should demand that it is used for these purposes for which it has a unique contribution to make. Just because growth is a priority does not mean it is a priority for aid.
Measured against reasonable claims about what aid can achieve, it is demonstrably effective. As we have seen with microfinance, the industry damages rather than enhances its case by overstating what aid can achieve. By setting realistic objectives, we can both make aid more effective, and demonstrate the difference it makes.
David Cameron said in the House of Commons that the Government is going to consider a social media kill switch:
Mr Speaker, everyone watching these horrific actions will be stuck by how they were organised via social media.
Free flow of information can be used for good. But it can also be used for ill.
And when people are using social media for violence we need to stop them.
So we are working with the Police, the intelligence services and industry to look at whether it would be right to stop people communicating via these websites and services when we know they are plotting violence, disorder and criminality.
I have also asked the police if they need any other new powers.
This has all the hallmarks of a Dangerous Dogs Act response. (That is Whitehall slang for a piece of poorly-conceived legislation which is implemented hastily to respond to a public outcry.)
There are many reasons this is a bad idea. Here are two.
First, in a year in which social media has played an important role in enabling citizens in Tunis and Egypt to overthrow their governments and, we all hope, move towards greater freedom and dignity, this would set an irresponsible precedent internationally. Which dictator or autocratic regime does not accuse protesters of ‘plotting violence, disorder and criminality’? Do we want to make it harder for citizens around the world to organise themselves to overthrow repressive governments?
Second, social media has also played a positive role over the last few days. Twitter was used to organise groups of responsible citizens who went out on the streets to clean up after the riots. (David Cameron called the ‘broom army’, organised through social media, ‘the best of British’). Pledgebank is being used to raise money to rebuild the iconic Reeves Corner building which was burned down in the riots. I’m told that switching off the mobile phone networks after the 7 July bombings contributed to the chaos.
When the Egyptian government was reported to have shut down social networking sites in a bid to stop the unrest there spreading, the UK Foreign Secretary William Hague said:
I would urge the Egyptian government, and I have urged the Egyptian government, to respect rights of freedom of assembly and freedom of expression. It would be futile over time to try to suppress such things.
Perhaps when the Government reflects on the overall balance sheet of the impact of social media over the last year, they will conclude that on balance it has been a force for good.
What a contrast to Jens Stoltenberg, the Prime Minister in Norway, who said this after the (much more tragic) violence there:
The Norwegian response to violence is more democracy, more openness and greater political participation.
Update: Here is Jeff Jarvis in the Guardian.
I really believe that this is how some organisations and government departments view knowledge sharing:
(h/t Ian Thorpe)
The Center for Global Development, where I work, has a shiny new transparency policy. From now on, our presumption is that when authors post publications on cgdev.org that involves quantitative analysis, they will also post the data and computer code needed to reproduce their results in full. That way, any visitor to the web site can check our work.
In his blog post explaining the new policy, David Roodman explains why this is important. It is intended to increase both the quality and credibility of our research, and to enable other researchers to use the data and the code.
Of course this is a little daunting for us too. As David says:
Fundamentally, then, the new data and code transparency policy is about putting the pursuit of truth first. We believe that this step is both right in itself and strategically smart. In statistical analysis, as in software, bugs are the norm. So placing more of CGD’s work in the public domain will inevitably expose mistakes. That can be a daunting prospect for an organization that prizes its reputation for high-quality analysis. But transparency serves the public good. And serving the public good is what CGD, as a charity, should do.
Our full policy is here (pdf).
There is a famine in the Horn of Africa. I know there is a lot else in the news at the moment – the awful events in Norway, the US debt crisis, the British hacking scandal – but we need to keep this at the front of our minds. The situation is very bad. If you can afford it, you can give money in British pounds here or in US dollars here.
It is at times like this that we get a lot of half-baked commentary about famine. We are told that the problem is drought, or over-population, or global warming. Special interest groups call for more money to be spent on agriculture. Commentators complain that we’ve given aid for decades and nothing gets any better.
So here are two things to keep in mind.
First, famine is not caused by drought or overpopulation or insufficient food production. As Amartya Sen explained in Poverty and Famines, people go hungry when they cannot access food, because they are too poor or because markets and governments fail. Drought is neither necessary nor sufficient for famine.
Ed Carr says that this insight holds in the current crisis:
The long and short of it is that food insecurity is rarely about absolute supplies of food – mostly it is about access and entitlements to existing food supplies. The HoA [Horn of Africa] situation does actually invoke outright scarcity, but that scarcity can be traced not just to weather – it is also about access to local and regional markets (weak at best) and politics/the state (Somalia lacks a sovereign state, and the patchy, ad hoc governance provided by al Shabaab does little to ensure either access or entitlement to food and livelihoods for the population). For those who doubt this, look at the FEWS NET maps I put in previous posts (here and here). Famine stops at the Somali border. I assure you this is not a political manipulation of the data – it is the data we have. Basically, the people without a functional state and collapsing markets are being hit much harder than their counterparts in Ethiopia and Kenya, even though everyone is affected by the same bad rains, and the livelihoods of those in Somalia are not all that different than those across the borders in Ethiopia and Kenya.
Map of the Horn of Africa by the Famine Early Warning System Network (FEWS-NET)
If you are interested in learning more, read Ed Carr’s book Delivering Development, and his blog. My colleague Charles Kenny makes a similar point in Foreign Policy.
Second, development aid works. Though there is considerable suffering, famine has been avoided in Ethiopia this time so far, and that is because of the safety net programme and disaster management system which has been set up by the Ethiopian government, with help from foreign aid. Remember 1984, and people leaving their land to make their way to feeding centres in Ethiopia? Not happening this time. Why not? Here’s what the BBC says:
BBC Africa analyst Martin Plaut says many people at the heart of the current disaster – in Ethiopia – have emerged relatively unscathed. This is because the government in Addis Ababa has such an extensive safety net in place, he says. Pre-positioned supplies mean the Ethiopian authorities could respond rapidly once the extent of the drought became clear. The first food distributions began in February and have continued to the worst effected communities across a vast area. Communities are suffering, but the famine that has hit neighbouring Somalia has so far been avoided in Ethiopia and overall the disaster management system, built up since the 1980s, has worked.
Martin Plaut is no starry-eyed apologist for the aid system or the Ethiopian government. But like me, he was in Ethiopia in 1984 so he knows what famine looks like; and he can see the difference in Ethiopia this time. As he points out, the investments that have been made over the past two decades have transformed Ethiopia’s ability to deal with bad rains. Ethiopia has suffered drought and famine about every ten years. But now a determined government, backed by foreign aid, has put in place systems which have made Ethiopia more resilient and prevented a repetition this time of past tragedies. If you are one of the Ethiopians who has put this in place, one of the hard-pressed development workers who has patiently assisted, or if you have contributed to aid, through taxes or donations, you should pat yourself on the back: bad as things are in the Horn of Africa today, the crisis would have been a lot worse without you.
Please spare a thought, and a few quid (or a few dollars) if you can afford it, for the 11 million people affected by hunger in East Africa today; and for the many aid agency staff working round the clock, often in difficult and dangerous conditions, to try to help them.
Update: Duck of Minerva thinks that Ed Carr and I are understating the role of physical factors. Brian Kahn, on the other hand, agrees that “ The current famine in the Horn of Africa isn’t caused by drought. Rather, a complex mix of societal and political factors created a dangerous situation“.
Duncan Green has been awaiting ”the inevitable response from Owen” to a recent post by Dr Kamal-Yanni of Oxfam and Daniel Berman of Médecins Sans Frontières about different approaches to getting vaccines into developing countries. The main point of disagreement is how vaccines first developed with rich countries in mind can best be made available quickly and at an affordable price in developing countries. This is an important issue because we have a poor record of making these vaccines available, which is part of the reason that 2 million people die each year of vaccine-preventable diseases.
There is a separate but related question of how we can get vaccines to be developed in the first place to protect against diseases which do not much affect people in rich countries. On this we apparently agree that it is a good idea to test commercial incentives such as Advance Market Commitments.
For vaccines developed primarily for industrialised countries, my view – which I expressed in an earlier blog post – is that we should use aid to make it more attractive, and more profitable, for pharmaceutical companies to invest in making these vaccines available in developing countries. The view of Dr Kamal-Yanni and Daniel Berman is that, on the contrary, we should “err on the side of the poor” by holding down prices, making these markets less profitable.
My ‘inevitable response’ is now on the CGD global health blog (and reproduced below). It is all a bit down in the weeds, but the main point is that it is simplistic to suggest that existing vaccines (for example, against pneumococcal infection) can simply be rolled out at marginal cost in the developing world. I explain why in in the blog post. Unless we do something to make these markets more attractive for the private sector, we will continue to see delays in access to vaccines in poor countries. In these circumstances, insisting on keeping prices down errs on the side of the ideology, not the side of the poor.
As always it would be great to have your views: comments are open on the CGD blog.
Primary school close to our house in Addis Ababa
Living in Ethiopia for the last three years, I saw aid working every day. I saw children going to school, health workers in rural villages, and food or cash preventing hunger for the poorest people. The academic debates about aid effectiveness seem surreal when you are surrounded by tangible, visible evidence of the huge difference aid makes to people’s lives.
But on the whole the sceptics are not disputing that kids are going to school because of aid. They are asking what effect that has on the country as a whole. Does it lead to economic growth? Does it drive up the exchange rate and so damage competitiveness? Do governments become dependent on donors and so less accountable to their own citizens? Does aid keep the bad guys in power?
It is possible that aid is effective in terms providing people with basic services, and at the same time that it is not effective at increasing economic growth. It is even possible that aid simultaneously does short-run good (better services) and long-run harm (worse institutions).
It was this difference between perspectives which made me want to respond to the call for evidence in an investigation into aid by the Economic Affairs Select Committee of the British House of Lords. This committee, which includes some well-known economists and other public figures, is examining the ‘Economic Impact and Effectiveness of Development Aid’.
My written submission is here. It is just six pages long. ( I’m very grateful to Stephanie Majerowicz for her help putting this together.)
The submission begins by trying to address the question of what aid is for, which seems to be the source of much of the confusion about whether aid works. Aid is often regarded as having two purposes: humanitarian aid to alleviate suffering usually in an emergency, and development aid to promote economic growth and sustained prosperity. But this is a false dichotomy: most aid falls into neither category. About two thirds of British bilateral aid is spent on improving services such as education, health, water and sanitation. This aid is not a temporary humanitarian response to an emergency, but a long-term contribution to the provision of key services and an investment in the institutions needed to provide them in the future. The success of this aid is not best measured by whether it leads to growth in the short or medium term, but by the improvements it brings about in the quality of people’s lives.
The submission then reviews the evidence about whether aid leads to economic growth (answer: we don’t know) and whether aid improves people’s lives (answer: yes it often does). The more interesting question is not whether aid works, but which aid works.
But there are also possible adverse effects of aid, and these are potentially serious. The submission suggests that these may be mainly a consequence of how aid is given and that they can largely be eliminated if donors give better aid. But that requires donors to overcome domestic political obstacles to reform of aid.
The evidence finishes with ten suggestions for how to make aid work better. They are:
- Spend more through the multilateral system
- Make aid more predictable
- Make aid transparent, accountable and traceable
- Build the accountability of governments to their parliaments and citizens
- Focus on results and use this to simplify aid
- Invest more in global public goods, especially new technologies
- Focus aid on people in chronic poverty, and on women and girls
- Leverage the private sector
- Use innovative finance to increase the productivity of aid
- Learn more and fail safely
It is a good discipline to be concise, but it is not possible to do full justice in six pages to the nuances of these issues. I have tried address the big questions with what I hope are balanced and dispassionate judgments. I hope you will let me know in the comments if you think I’ve got these right.
Read the full submission here.
This blog post was also published on CGD Views from the Center.
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